01
Notice Analysis
Decoding the DRC-01 to identify the section, tax period, demand amount, grounds and the DRC-01 notice reply procedure applicable.
- Section 73 / 74 / 74A check
- Demand quantification review
- Validity defects (signature, DIN, service)
What is a DRC-01 notice reply?
A DRC-01 notice reply is the formal written response to a show-cause notice in Form GST DRC-01. The DRC-01 is the electronic summary of a show-cause notice issued under Rule 142(1)(a) of the CGST Rules, 2017.
The DRC-01 notice reply must be filed in Form DRC-06 on the GST portal. It becomes part of the official record and forms the basis on which the proper officer either closes the proceeding under DRC-05 or proceeds to a demand order under DRC-07.
The GST DRC-01 notice reply procedure requires the taxpayer to address each allegation separately, provide documentary evidence and cite the relevant statutory provisions and case law. A generic denial is not a valid DRC-01 notice reply.
Why the DRC-01 notice reply form matters
- It creates a record of the taxpayer's defence for appeal or writ
- It can result in closure under DRC-05 without any demand
- It preserves the right to personal hearing under Section 75(4)
- It is a prerequisite for many writ remedies before the Patna High Court
Section 73, 74 or 74A — which DRC-01 notice reply applies?
The first step in any GST DRC-01 notice reply procedure is to identify the section under which the notice is issued. This determines the penalty exposure, the limitation period and the DRC-01 notice reply remedy available.
| Section | Applicability | Penalty | DRC-01 notice reply deadline |
|---|---|---|---|
| Section 73 | Non-fraud cases — tax not paid, short-paid, erroneous refund, wrong ITC (up to FY 2023-24) | 10% of tax or ₹10,000, whichever is higher | 30 days for DRC-06 reply |
| Section 74 | Fraud, wilful misstatement or suppression of facts (up to FY 2023-24) | Up to 100% of tax | 30 days for DRC-06 reply |
| Section 74A | Both fraud and non-fraud, from FY 2024-25 onwards | Depends on fraud vs non-fraud | 60 days for reduced penalty payment |
The section under which the DRC-01 is issued changes the entire DRC-01 notice reply strategy. Section 73 allows a lower penalty and a shorter limitation. Section 74 carries higher penalty exposure and a longer limitation. Section 74A unifies both for FY 2024-25 onwards and provides a 60-day window for reduced penalty payment.
DRC-01 notice reply procedure under Section 74A
Section 74A was inserted by the Finance (No. 2) Act 2024, effective 1 November 2024. For tax periods from FY 2024-25 onwards, the DRC-01 notice reply procedure under Section 74A differs from the earlier framework — there is a single 42-month limitation period for both fraud and non-fraud cases, and a 60-day window for payment with reduced penalty.
GST DRC-01 notice reply procedure — step by step
The GST DRC-01 notice reply procedure involves several steps from receipt of the notice to final filing.
Step 1 — Read the DRC-01 in full
Extract the tax period, demand amount, section invoked, grounds and deadline. Check whether the DRC-01 contains a valid digital signature and correct DIN. A DRC-01 without signature may not be a valid notice.
Step 2 — Verify service and jurisdiction
Confirm that the DRC-01 was properly served. The Patna High Court has held that uploading a DRC-01 only under the "Additional Notices and Orders" tab, without proper service, can amount to denial of a reasonable opportunity.
Step 3 — Compile DRC-01 notice reply documents
Gather all documents required for the DRC-01 notice reply documents set — returns, invoices, ledgers, bank statements and reconciliation statements. The DRC-01 notice reply documents must be indexed and cross-referenced to each allegation.
Step 4 — Draft the DRC-06 reply
Draft the DRC-01 notice reply in Form DRC-06. Structure it with preliminary objections, statement of facts, point-wise rebuttal, statutory citations and prayer. Each allegation in the DRC-01 must be addressed separately.
Step 5 — File on the GST portal
Upload the DRC-01 notice reply in Form DRC-06 on the GST portal under Services → User Services → View Additional Notices and Orders. Attach the DRC-01 notice reply documents.
Step 6 — Attend personal hearing
Where a personal hearing is scheduled, attend and argue the DRC-01 notice reply. Section 75(4) requires an opportunity of hearing where an adverse order is contemplated.
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DRC-01 notice reply documents — complete checklist
The DRC-01 notice reply documents required depend on the nature of the allegation in the notice. The following table sets out the commonly required DRC-01 notice reply documents.
| Allegation in DRC-01 | DRC-01 notice reply documents required |
|---|---|
| ITC mismatch (GSTR-2B vs 3B) | GSTR-2B extract, purchase register, invoices, payment proof, supplier confirmation |
| GSTR-1 vs GSTR-3B mismatch | GSTR-1, GSTR-3B, sales register, reconciliation statement |
| Short payment of tax | Tax computation, challans, electronic cash ledger, bank statements |
| Erroneous refund | Refund application, sanction order, shipping bills, bank realisation certificates |
| Suppression of facts | Returns filed, disclosure records, correspondence, evidence of no intent to evade |
| Excess ITC claim | ITC ledger, GSTR-2A/2B, invoices, e-way bills, proof of receipt of goods |
Additional DRC-01 notice reply documents
- Copy of the DRC-01 notice with all attachments
- GST registration certificate and PAN
- Audited financial statements for the relevant period
- Board resolution or authorisation for the signatory
- Previous replies or submissions filed with the department
- Any appellate orders or writ orders relevant to the matter
Practical point on DRC-01 notice reply documents
The strength of a DRC-01 notice reply lies in the documents. A DRC-01 notice reply without supporting documents is a statement of position, not a defence. The DRC-01 notice reply documents must be indexed, paginated and cross-referenced to each allegation in the notice.
Patna High Court on the DRC-01 notice reply and procedure
The Patna High Court has developed significant precedent on the GST DRC-01 notice reply procedure and the consequences of procedural defects.
King Bricks v. State of Bihar (2026)
The Patna High Court set aside an ex-parte demand order where no opportunity of personal hearing was granted. The Court held that the DRC-01 notice was not effectively communicated because it was uploaded under the "Additional Notices and Orders" tab instead of the designated "Notices and Orders" tab.
Umagaurav Private Limited v. State of Bihar (2026)
The Patna High Court imposed costs of ₹25,000 where the petitioner challenged a GST demand after having given an undertaking and post-dated cheques. The Court found the writ petition non-bona fide. The DRC-01 notice had been uploaded but no DRC-01 notice reply was filed.
Parvinder Singh v. State of Bihar (2025)
The Patna High Court set aside assessment and appellate orders where the department issued a DRC-01 notice under Section 74 despite the petitioner having already filed GST returns. The Court held that the proceedings should not have been initiated.
Broad Son Commodities v. State of Bihar (2025)
The Patna High Court examined a matter where a DRC-01 notice was served only by uploading on the GST portal with no DRC-01 notice reply filed. The Court considered the consequences of non-filing of the DRC-01 notice reply.
30-day statutory period — Section 73(8) violation
The Patna High Court has held that an assessment order passed before the expiry of the minimum 30-day reply period under Section 73(8) is invalid. In one case, the DRC-01 notice was issued on 14 February 2021, but the assessment order was passed on 23 February 2021 — only nine days later. The Court quashed the order for violation of the statutory 30-day period applicable to the DRC-01 notice reply.
DRC-01 defective or order passed without hearing?
Get a Patna High Court remedy assessment.
DRC-01 notice reply remedy — what if the reply is rejected?
The DRC-01 notice reply remedy depends on the outcome. If the officer accepts the DRC-01 notice reply, the proceeding is closed under DRC-05. If the DRC-01 notice reply is rejected or no reply is filed, a demand order is issued under DRC-07.
| Stage | Form | DRC-01 notice reply remedy |
|---|---|---|
| Pre-notice intimation | DRC-01A | Pay tax + interest under DRC-03 → zero penalty (Section 73) or 15% penalty (Section 74) |
| Show-cause notice | DRC-01 | File DRC-06 DRC-01 notice reply within 30 days |
| Closure | DRC-05 | Proceeding closed — no demand |
| Demand order | DRC-07 | File Section 107 appeal within 3 months + 10% pre-deposit |
| Appellate order | APL-04 | File Section 112 GSTAT appeal within 3 months + 10% pre-deposit |
| Tribunal order | — | Writ petition before Patna High Court under Article 226 |
Section 107 appeal as DRC-01 notice reply remedy
Where the DRC-01 notice reply is rejected and a DRC-07 demand order is issued, the first DRC-01 notice reply remedy is an appeal under Section 107 before the Appellate Authority. The appeal must be filed within 3 months, with a 10% pre-deposit of the disputed tax payable from the Electronic Cash Ledger.
Writ petition as DRC-01 notice reply remedy
Where the DRC-07 order violates natural justice or is without jurisdiction, a writ petition under Article 226 before the Patna High Court may be the appropriate DRC-01 notice reply remedy. However, the Patna High Court has consistently held that the alternative remedy under Section 107 must ordinarily be exhausted first.
DRC-01A — the pre-notice stage before the DRC-01 notice reply
Before issuing a formal DRC-01, the officer may first issue a DRC-01A intimation under Rule 142(1A). The DRC-01A is not a show-cause notice — it is an intimation of tax ascertained as payable.
The DRC-01A is the cheapest exit point. If the taxpayer pays the full tax and interest at the DRC-01A stage:
- Zero penalty under Section 73(5) for non-fraud cases
- 15% penalty under Section 74(5) for fraud cases
- No adjudication record on the GSTIN profile
If the DRC-01A is ignored, the officer escalates to DRC-01, and the DRC-01 notice reply procedure becomes necessary with higher penalty exposure.
Practical point on DRC-01A
The DRC-01A stage is the single most valuable opportunity in the entire DRC-01 process. A day-one response capability — assessing whether the position is defensible or whether voluntary payment is the sensible commercial decision — can eliminate penalty exposure entirely in non-fraud cases, avoiding the need for a DRC-01 notice reply altogether.
Practical checklist before filing your DRC-01 notice reply
- Identify the section under which the DRC-01 is issued — 73, 74 or 74A.
- Check the DRC-01 for valid digital signature and correct DIN.
- Verify that the DRC-01 was properly served — not just uploaded on the portal.
- Note the 30-day deadline for the DRC-01 notice reply and diarise it.
- Extract the tax period, demand amount and each allegation.
- Compile the DRC-01 notice reply documents for each allegation.
- Reconcile ITC, turnover and tax figures against the department's computation.
- Draft the DRC-01 notice reply in Form DRC-06 with point-wise rebuttal and statutory citations.
- Attach indexed annexures to the DRC-01 notice reply.
- File the DRC-01 notice reply on the GST portal in Form DRC-06.
- Attend the personal hearing and argue the DRC-01 notice reply.
- Retain all acknowledgments and prepare for the DRC-01 notice reply remedy if rejected.
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Costs and risks of a deficient DRC-01 notice reply
A deficient DRC-01 notice reply carries consequences. The Patna High Court has imposed costs of ₹25,000 in Umagaurav where the petitioner challenged a GST demand after giving an undertaking and then failed to file a DRC-01 notice reply.
- Ex-parte demand order — if no DRC-01 notice reply is filed
- Penalty exposure — 10% under Section 73, up to 100% under Section 74
- Interest — 18% per annum under Section 50
- Recovery proceedings — bank attachment and garnishee proceedings
- Costs in writ — if a non-bona fide challenge is filed
The risk of costs is a material consideration in deciding the DRC-01 notice reply strategy and any subsequent DRC-01 notice reply remedy. A careful pre-filing assessment is essential.
Frequently Asked Questions on the DRC-01 notice reply
What is a DRC-01 notice reply?
A DRC-01 notice reply is the formal response to a show-cause notice in Form GST DRC-01, filed in Form DRC-06 on the GST portal within 30 days. It addresses each allegation with documents and legal grounds.
What is the GST DRC-01 notice reply procedure?
The GST DRC-01 notice reply procedure involves: identifying the section, checking validity and service, compiling documents, drafting the DRC-06 reply, filing on the portal, and attending the personal hearing.
What documents are required for a DRC-01 notice reply?
DRC-01 notice reply documents include GSTR-1, GSTR-3B, GSTR-2B extracts, purchase and sales registers, invoices, e-way bills, bank statements, tax challans and reconciliation statements — depending on the allegation in the notice.
What is the deadline for filing a DRC-01 notice reply?
The DRC-01 notice reply must ordinarily be filed in Form DRC-06 within 30 days of the notice. Some notices specify a shorter or longer period, so the deadline stated in the notice should be checked.
What is the DRC-01 notice reply remedy if the reply is rejected?
If the DRC-01 notice reply is rejected, a demand order is issued under DRC-07. The DRC-01 notice reply remedy is a Section 107 appeal within 3 months with 10% pre-deposit, followed by a Section 112 GSTAT appeal if needed, and a writ petition before the Patna High Court where grounds exist.
Can a DRC-01 notice reply be filed after the 30-day deadline?
The portal may allow late filing, but the officer may proceed ex-parte. The Patna High Court has held that an assessment order passed before the expiry of the minimum 30-day period under Section 73(8) is invalid. If the deadline is missed, file the DRC-01 notice reply immediately and seek an opportunity of hearing.
Is a DRC-01 without digital signature valid?
Rule 142 mandates that DRC-01 and DRC-07 be issued in the prescribed form with signature, name, designation, jurisdiction and address. In the absence of signature, the notice may not be valid. This can be raised as a preliminary objection in the DRC-01 notice reply.
What is the difference between DRC-01 and DRC-01A?
DRC-01A is a pre-notice intimation of tax ascertained as payable, giving an opportunity to pay voluntarily at reduced or zero penalty. DRC-01 is the formal show-cause notice requiring a DRC-01 notice reply in Form DRC-06.
Can a DRC-01 notice reply be filed without paying tax?
Yes. If the taxpayer disputes the demand, the DRC-01 notice reply can be filed in DRC-06 without payment. If partially disputed, the admitted portion can be paid through DRC-03 and the disputed portion contested in the DRC-01 notice reply.
How can Advocate Simran Kumari help with a DRC-01 notice reply?
The chamber assists with notice analysis, DRC-01 notice reply documents compilation, DRC-06 drafting, portal filing, personal hearing representation and the DRC-01 notice reply remedy including appeal and writ. Direct chamber access is available at P.C. Colony, Kankarbagh, Patna.